Adeno-associated virus type 2 (AAV2) encodes four antigenically related, non-structural polypeptides via a combination of alternative promoter utilization and differential splicing events, which are known to as Rep78, Rep68, Rep52, and Rep40. The rep gene products are essential for AAV DNA replication and play a role in the regulation of AAV gene expression. We have demonstrated that Rep68 and Rep78 are capable of binding linear duplex DNA bearing a cognate Rep-binding site. To define the Rep/DNA interactions, a modified random oligonucleotide selection procedure was performed using purified recombinant Rep proteins. Electromobility shift assays (EMSA) were used to isolate oligonucleotide probes containing Rep binding sites from a pool of randomly generated oligonucleotides containing over 10 e12 sequence combinations. With this technique a canonical binding site (A/GvbGAGCGAGCnA/CG) was identified. This information suggests that cognate sites within genomic DNA may be recognized by the Rep proteins, thus raising the possibility of Rep-mediated modulation of cellular gene expression. Indeed, one such chromosomal Rep-binding site is the AAV integration locus on the long arm of human chromosome 19 (AAVS1). Modulation of cellular gene expression provides a possible mechanism for the anti-oncogenic and anti-transforming effects associated with AAV infection. We have determined that the optimal Rep binding site is a repeating motif of GAGC residues. Computer analyses indicate that numerous cellular genes, including the human CSF, IGFBP, gadd45, and PAX3 genes, possess potential Rep-binding motifs.